Kristof’s India analysis is way off

Nicholas Kristof places a bet on India in the New York Times that should please someone like me. The only problem is that his analysis is way off.

In his January 17 column, Kristof postulates that India could quite possibly be China’s rival for becoming the global superpower in the next century, if only it could manage its economy better. But all that Kristof has to offer as solutions are tired neoliberal nostrums. His ideological blinkers make him unable to see reality.

The article starts off on a wrong note. “India was the world’s great disappointment of the 20th century,” Kristof says. Maybe. But the Brits controlled the country for almost half this period, sucking it dry. When they left, India’s literacy rate was an appalling 14 percent, for instance, and an average Indian could expect to live to the grand old age of thirty. Independent India was dealt a horrible deck of cards, even if it is true that it played its hand badly, although not for the reasons that Kristof cites.

Kristof visits a school for indigent children, and applauds the thirst for education shown by deprived kids. What he fails to note, however, is that the Indian leadership neglected its underprivileged by a consistently elitist bias in its educational policies.

“Inadequate public expenditure is one important reason for India’s poor educational achievements,” Nobel-winner Amartya Sen and Jean Dreze note in “India: Economic Development and Social Opportunity." They add: “The neglect of literacy and elementary education relates, to a considerable extent, to the extraordinary priority that has actually been given to expanding higher education.”

The result: Almost half of India’s women are not even barely literate, according to the latest census, even as the country’s elite Indian Institutes of Technology graduate some of the best technical wizards in the world.

Kristof’s criticism of Indian labor laws is even more misinformed. “Restrictive labor laws mean that companies hesitate to hire, and regulations tend to suffocate entrepreneurship,” Kristof writes.

There’s one slight factual problem here. Ninety percent of India’s workforce is in the informal, i.e., unregulated sector, with almost no laws of any sort governing it. Minimum wage regulations and safety or environmental standards are routinely ignored, child labor and bonded labor is rampant, and profits are made by exploiting labor to the maximum extent possible. “Because capital’s control over labor remains essentially despotic, the logic of accumulation in India has been one of labor-squeezing rather than innovation,” writes Patrick Heller in “The Labor of Development: Workers and the Transformation of Capitalism in Kerala, India.” He says: “For all its bureaucratic capacity, the Indian state has by and large failed to penetrate the unorganized sector.” But for Kristof, all that is holding Indian entrepreneurs back is an onerous regulatory system.

Also, I fail to understand Kristof’s focus on outsourcing—and how it could serve as the route to success for India's (hundreds of) millions. As Kristof himself notes, only one million Indian people work in technology, a fraction of a percentage of India’s labor force.

But this isn’t due to inadequate economic reform, as Kristof implies.

Two-thirds of India’s population still toils in the villages. The growth rate of Indian agriculture has slowed considerably in the post-reform era, due to factors such as a decline in public investment and little available credit caused because of the state’s withdrawal from the economy. This has had a hugely negative impact on rural employment. (The Hindu newspaper’s rural affairs editor, Palagummi Sainath, has written several articles documenting the plight of the rural destitute.) Plus, there is a fundamental mismatch between the skills of the rural unemployed and those needed in the information technology sector. Any employment scheme directed at them will have to be a fundamentally different nature. (Kristof fails to note that the current Indian government has passed a rural employment bill a few months ago, with its ameliorative effect on India’s rural poor too soon to assess.)

Even when Kristof’s analysis seems superficially accurate, as his criticism of India’s handling of its AIDS crisis is, it still misses the bigger picture. One of the prime reasons for the spread of AIDS is an almost nonexistent public health infrastructure due to constant underspending by Indian governments through the years. “Of the 175 countries documented by the Human Development Report, only four have a lower public spending on health than India,” writes Asha Krishnakumar in the Frontline magazine, a leading Indian publication. The consequences are there for everyone to see: massive epidemics of multiple diseases, ranging from malaria and tuberculosis to dysentery and AIDS.

But perhaps I am expecting too much from Kristof. After all, this is the same person who wrote a few years ago in “Thunder From the East: Portrait of a Rising Asia” that one of the main reasons India failed to develop is because it took Gandhi’s economic ideas too seriously.

Kristof apparently doesn’t know that India’s state-led industrialization model was in violation of basic beliefs that Gandhi held. Only a complete ignorance of India would have someone state that “Gandhi’s foolish economic ideas” had “helped keep India impoverished,” as Kristof did in his book, blaming the Mahatma for 1.9 million Indian kids dying before the age of one, mostly from preventable diseases.

Is it too much to expect New York Times columnists to have a fundamental understanding of the country they write about? Perhaps, as Kristof’s more famous counterpart, Thomas Friedman, has repeatedly shown in his jottings on India. Still, it wouldn’t hurt.